The WasteWatcher: The Staff Blog of Citizens Against Government Waste

Don’t Know Much About Algebra

The WasteWatcher is the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). For questions, contact blog@cagw.org.


Paul Krawzak wrote in the June 4 Roll Call about some disturbing news that came from an April Congressional Budget Office (CBO) report on the Affordable Care Act (Obamacare.)  Said Krawzak, “In a little-noticed footnote to a report issued in April, ‘Updated Estimates of the Effects of the Insurance Coverage Provisions of the Affordable Care Act,’ the CBO wrote that it and the Joint Committee on Taxation ‘can no longer determine exactly how the provisions of the ACA that are not related to the expansion of health insurance coverage have affected their projections of direct spending and revenues.’”

Krawzak pointed out that for “Democratic lawmakers who were hesitant to sign onto the sweeping 2010 health care law, one of the most powerful selling points was that the Affordable Care Act would actually reduce the federal budget deficit, despite the additional costs of extending health insurance coverage to the uninsured.

“Four years after enactment of what is widely viewed as President Barack Obama’s key legislative achievement, however, it’s unclear whether the health care law is still on track to reduce the deficit or whether it may actually end up adding to the federal debt.  In fact, the answer to that question has become something of a mystery.”

No doubt this news will provide more political fodder for Republicans to use to in the upcoming November elections as Obamacare still remains unpopular among most Americans.

Krawzak pointed out that the “CBO did say that one element of the law’s fiscal impact is relatively clear: its changes to insurance coverage.

“In its April report, the CBO updated its estimates of the budgetary effects of health insurance coverage provisions of the law, including subsidies, the Medicaid expansion, penalties paid by employers and individuals for not providing or purchasing insurance, and the excise tax on high premium insurance plans.”

Krawzak went on to say, “While CBO can isolate and reassess the provisions of the ACA that expanded insurance coverage, it cannot perform the same analysis on the portions of the law that modified existing federal programs and made changes to the tax code.”

In reality, it is not a surprise that the CBO cannot score the affect the law is having on the budget deficit.  After all, the Obama administration has ignored whole sections of the law and has delayed major provisions such as the employer mandate, the federal exchange (SHOP) for small businesses, allowing insurance companies to re-offer plans they were previously told to drop, canceling some Medicare Advantage cuts, among many others.  The Galen Institute is tracking the many changes that have occurred, both legal and extralegal.  As of this writing, there have been 41 changes to the law, 23 by executive action.

Krawzak reported that Dan Mandelson, who runs the consulting company Avalare Health, stated that it’s always hard to track the fiscal effects of a new law because so many things change at once.  But Mandelson added, “at a certain point it becomes irrelevant because it’s all part of the baseline of expenditures.  It’s current law.  And if somebody wants to repeal some portion of that law, then you can assess in a targeted way what that would cost or what the spending impact would be.”  Mandelson used to be the association director for the White House’s Office of Management and Budget.

Krawzak also reported that “Paul N. Van de Water, a senior fellow at the left leaning Center on Budget and Policy Priorities and former assistant director for budget analysis at the CBO, argues the adjustments in the law will have little fiscal impact as long as they remain temporary.”

But Krawzak also queried Charles Blahous, a senior research fellow at George Mason University’s free market-oriented Mercatus Center, about the CBO not being able to estimate the costs of Obamacare on the federal budget.  Blahous said the inability to score the law is “a real problem” and the various provisions that have been delayed bring further doubts about the various “cost-saving measures” that have yet to be implemented.  He says, “The question is, if things haven’t been enforced to date, is it really a valid assumption to assume they will be fully enforced going forward?  You have this sort of invisible undoing of the financing of the ACA.  But it doesn’t appear anywhere in the scorekeeping, because we assume it’s not going to happen in the future, and we’re not keeping track of it happening in the past.

“This is what happens when a vast new spending program is passed on a partisan basis.  Those who opposed the law have no stake in enforcing the provisions required to finance it. Those who enacted the ACA don’t want sole political ownership of its tax increases, penalties and Medicare spending cuts, so they scale them back.”

In response to the report about CBO’s announcement, Senator Ron Johnson (R-Wisc.) has introduced a bill, entitled the “Truth in Obamacare Accounting Act” that would require the CBO to score the cost of Obamacare on the federal deficit.  Johnson said in a press release when he introduced the bill:

“Today, I introduced the ‘Truth in Obamacare Accounting Act’ that would require the Congressional Budget Office to provide, on an ongoing basis, a full and complete accounting of the costs and revenues associated with Obamacare.  I initially proposed this in March 2013 as an amendment in the Senate Budget Committee that was adopted with bipartisan support and included in the budget that passed the Senate on March 23, 2013.

“News this week has highlighted a real problem in how Congress accounts for this huge expansion of government health care spending.  CBO undoubtedly faces considerable challenges in separating the impact of the law from some of the other programs that interact with it, but it can and should be able to estimate those costs and impacts so that Congress and the American people understand the true scope of financial harm that Obamacare is causing.  The estimates related to coverage-only provisions are inadequate for assessment of a law that touches nearly every aspect of our health care system.”

It will be interesting to see if Johnson’s bill has any traction.  I am betting it won’t get out of Majority Leader Harry Reid’s Senate.

So for now, we could add another fib, mistruth, false fact, or lie about Obamacare to the growing list of promises made but not kept.  President Obama said his healthcare reform law wouldn’t add a dime to the debt.  But then again, how do we know?  Charles Blahous is right, this is a real problem.

Sign Up for Email Updates!Click Here!

View Archives

Posts by Author

Posts by Tag

Big Government (151) Waste (72) Obamacare (69) Budget (66) Healthcare (66) Congress (59) Uncategorized (56) Telecommunications (49) Debt (43) Technology (42) Internet (42) Deficit (42)